Social Networks – Flipping Traditional Marketing on its Head

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Attention all: You are no longer in control of your marketing messages.

How many times, and in how many ways, have we declared that today’s consumer has total power over all of commerce? Hundreds? Thousands? I don’t know, but certainly enough that if there are any of our readers who still don’t get it, they need a brain transplant.

Just as retail, wholesale and service business models are being driven by consumers’ shifting desires, these same dynamics are driving an equally fundamental transformation in the communications, advertising and media industries.

Permission-Based Marketing

Reflecting consumer behavioral shifts, technological advances continue to expand an infinite number of distribution platforms for communications, products and services that can literally follow, and access, individual consumers 24/7. Unfortunately for marketers, technological innovations have allowed consumers to block what they don’t want entering their “personal spaces;” and also enable people to invite or grant permission to precisely what they do welcome.

What this means is that the company no longer controls its communications about products or services. The power of social network sites, blogs and other electronic platforms is that they disintermediate traditional, well-orchestrated marketing messages from consumer-products businesses. For instance, Pampers’ launch of Dry Max diapers a few years ago was substantially hindered by online critics; an article in the Financial Times referred to the diaper and the online contagion by saying, “The criticism . . . spread like a rash.” So much for their strategic communications plan, sidelined at every turn by vocal and influential online bloggers.

On Overdrive and Overload

In addition to the overabundance of stores, stuff and everything else produced over the past 20 years, there has also been a deluge of communications of all types, including advertising. The communications tool of choice has been the Internet and social media, which has redefined what a floodgate of communications looks like.

With nearly a billion websites emitting enough information to fill 17 Libraries of Congress every three years; hundreds of TV channels; enough magazine titles to accommodate any niche interest; and many, many more communications platforms, all chasing after every single consumer and bombarding them with noise, consumers have finally said, “No more.”

So now what? Traditional media and the advertising world are scrambling to convert their antiquated approaches into sophisticated models that seek acceptance into consumers’ lives. They are also becoming more savvy in how they craft the messaging. Hence, a fundamental transformation of the media and advertising industries is emerging to precisely target both content and distribution and at the same time measure its quality and cost of contact. The industry is getting a lot more serious about the real costs of advertising and marketing, whether it reaches the right audience, and how it drives a truly measurable ROI.

Many top brands continue to shift ad spending to digital media (sponsored content, native ad placements, and rich digital media). They’re looking to track users across all digital channels and device types that help deliver and track the response to brand messages. Internet marketers are using channels including Facebook, YouTube, Twitter, Google+ and Pinterest; and devices including mobile, TV, tablet and desktop.

Consumers will continue to turn off when confronted by unwanted advertising content and media overload. This is one of the major challenges confronting online social networks, particularly Facebook. It is still struggling to determine how to commercialize a network that was designed to connect friends but has been hijacked by brands as a marketing vehicle. Facebook friends feel intruded upon by marketers, which creates a negative halo effect for the brands. Accordingly, marketers are trying to figure out how to be welcomed and permitted into Facebook personal spaces. But I would argue that social sites like Facebook are the last place for effective advertising and marketing, unless it is generated by the users themselves.

Viewership, readership and listenership continue to shift from TV, magazines, newspapers and radio to the Internet and mobile. As a consequence, all the ratings measures of traditional media, along with all their top and bottom lines, plummeted in the 2000s, and continue to spiral downward today.

Consumers expect most online and app content to be free, or almost free. They demand control of the messaging they receive, rather than having ads and information forced on them. If you get the message right; use the appropriate communications channel; have permission to send; and add in the fact that it’s also interactive in real time, it can produce significant, immediate gratification.

There’s a sea change facing all of us. Traditional media and advertising, like traditional retailing, are transforming themselves to be responsive to the digital shifts that are redefining all consumer-facing industries. The brands that do not make these digital and social-attitudinal strategy changes will disappear. Many already have.

P&G: An Early Innovator

P&G anticipated the shift years ago. As early as 2004, its global marketing officer, James Stengel, told Forbes.com: “The mass-marketing model is dead. This (word of mouth) is the future.”

Putting its money where its word-of-mouth was, P&G launched the Tremor Division, consisting of 280,000 teenagers who, for nothing more than a few coupons and product samples, spread the word (and samples), endorsing the products at school, parties, sleepovers, and digitally. At the time, only a third of Tremor’s activities were devoted to P&G products. Most of the viral marketing was for other national brands such as AOL, Coca-Cola, Kraft Foods and Toyota, for which P&G charged hefty fees to deliver an influential aggregated audience.

P&G was ahead of the curve. Statistics show that advertising is no longer the main influence on a consumer purchase. Consumers are now learning about products via friends; from other trusted peers online; by visiting other buyers’ blogs or forum discussions; and by reading buyer comments. Fashion bloggers are getting front-row seats at designer shows, and are eclipsing traditional media in reach and influence. Word of mouth has now become the primary driver across all consumer-facing industries.

The Future and Privacy

So what is the future going to hold for advertising, marketing and media? Technology and privacy battles will become bigger and more frequent, causing even hotter touchpoints. Particularly in Europe where the privacy rules are more stringent, which impacts American companies doing business overseas. Mobile devices will become the primary way of collecting information, thanks to the ever growing and improving mobile phone access around the world. The next wave of marketers will come from the digital natives, those most immersed in technology, who haven’t known anything but an “always-on” lifestyle and culture.

Then how are marketers going to transform their models to survive and serve the 21st century consumer? David Kirkpatrick, a senior editor and columnist for Fortune magazine, referring to the book The Future of Competition: Co-Creating Unique Value with Customers, provided a new framework for us to theorize about the future of media and advertising. He said we’re entering a “bottom-up-economy,” in which consumers will migrate to businesses that allow them to be participants in the process of creating what they want. Consumers are going to be wired, but only to what they choose to be wired to. Consumers will construct their own individualized life-models, essentially a digital file of all those things they like or want — products, services, brands, books, magazines, music, entertainment, etc. They will key in those things that are invited into their online spaces. Conversely, there will be an explicit list of what they will not permit, as well as instructions as to when and how they want to be reached. Basically, a do-not-call list on steroids. All consumer businesses will have access to the big data generated by what customers permit.

The good news for all marketers in this imminent future-scenario is that they will be able to create customized communications directly to existing and targeted consumers more efficiently and effectively, and with precise quantifiable measures of return on investment. It’s a future world of one-to-one marketing, as long as respect for privacy becomes the mantra that leads customer outreach and acquisition.

Revolutions are painful and costly, but considerably less so than when consumers put you out of business.

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